Australian Superannuation and US Tax
I'm a US Citizen living permanently in Australia (moved to Aus in 1999, moved back to US from 2008-2010 for work, and moved permanently to Aus in 2010). Have lived and worked in Aus longer than I ever lived in the US (not that this matters).
Have been filing US taxes each year through HR Block Expat taxes (which cost a mint but it's complicated to understand how to file for free...happy for advice though).
My question concerns what to do with Australian Super. Previous advice has been just to report on the FBAR, which I've done.
This year, HR Block have this note:
- Australian Superannuation plans do not qualify for deferred tax treatment in the U.S. All employer contributions to your superannuation are taxable as additional compensation, and any contributions you make yourself are not tax deductible. There are two positive aspects to not having deferral treatment for Supers. First, any contributions that are taxed increase your overall investment in the plan so that portion would not be subject to tax again in the future. Second, additional foreign tax credits from your employment income can help to offset the tax attributable to the employer amounts. If you have access to your most recent Superannuation statement, please provide us with a copy of this form.
What does that mean? I've already been stung for investing in Aus ETFs (totally toxic asset class for expats). Tax on super seems ruinous. Has the law changed? Any advice welcome.